2014 Queen’s Speech disappointing on deregulation

“The Queen’s Speech offered little to comfort those in favour of smaller government and deregulation. Faced with a still enormous budget deficit of £100bn, and an ongoing squeeze on the cost of living, we still seem to have a government that believes that British business needs more regulation. Plastic bag taxes, regulations on freely-negotiated pub tenancies and increased subsidies for childcare are irrelevant to the serious structural problems underlying our economy.”

“Charges for plastic bags should not be the remit of the government but a choice for individual retailers. Shops will now face an additional administrative and financial burden. Tighter regulations on pub companies fail to recognise that tenanted pubs provide an important way into the market for those who could not obtain the capital to buy their own businesses.

“Childcare tax breaks are a not a solution to the problem of high costs, which are a direct result of government regulation in the sector. The UK already has a very high level of state support for child care. The problem is not lack of subsidy, but over-regulation leading to some of the highest childcare costs in Europe.

“There is some good news with reforms to pensions policy. Increased flexibility through the removal of restrictions on access to pension pots and the introduction of Dutch-style pensions are welcome. Whilst this is good news, in many senses, collective pensions are a return to the way company pensions worked until the government began to tie them up in red tape from the mid-1980s. Increased regulation was an important reason why company defined-benefit schemes collapsed in the last twenty years. It may now not be possible for the government to re-create what it has destroyed”.

The mission of the Institute of Economic Affairs is to improve understanding of the fundamental institutions of a free society by analysing and expounding the role of markets in solving economic and social problems.

The IEA is a registered educational charity and independent of all political parties.